The Australian Workers' Union v Lactalis Australia Pty Ltd T/A Lactalis Australia Pty Ltd
[2021] FWC 1169
•3 MARCH 2021
| [2021] FWC 1169 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
The Australian Workers' Union
v
Lactalis Australia Pty Ltd T/A Lactalis Australia Pty Ltd
(C2020/4518)
Food, beverages and tobacco manufacturing industry | |
COMMISSIONER HUNT | BRISBANE, 3 MARCH 2021 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] – whether employees entitled to quad time for work performed on certain day – principles of construction of enterprise agreements – questions for arbitration answered.
[1] On 10 June 2020, the Australian Workers’ Union (the AWU) applied to the Fair Work Commission (the Commission) pursuant to s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute arising from the application of the terms of the Lactalis Australia Pty Ltd – Brisbane Operations Enterprise Agreement 2019 (the Agreement) to employees of Lactalis Australia Pty Ltd (Lactalis), formerly Parmalat Australia Pty Ltd. The Agreement applies only to the Lactalis Brisbane Operations, defined as Lactalis sites at South Brisbane, Richlands and Geebung.
Jurisdiction
[2] Neither party disputes that this matter is capable of being heard and determined by the Commission in accordance with the dispute resolution procedure provided by clause 2.5 of the Agreement. Conciliation has failed to resolve the dispute. I am satisfied the Commission has power to arbitrate the dispute.
Background
[3] Lactalis owns and operates dairy production and distribution operations in Brisbane, Queensland. It undertakes continuous operations across three 7.6 hour shifts, being:
(a) “Days” of 6:00am to 1:36pm;
(b) “Afternoons” of 2:00pm to 9:36pm; and
(c) “Nights” of 10:00pm to 5:36am.
[4] The AWU and Lactalis dispute whether Lactalis employees who worked their ordinary hours, and then performed work on Saturday, 25 April 2020 (being ANZAC Day), are entitled to be paid up to quad time; made up of double the rate of overtime provided per clauses 7.1.5 and 7.1.6 of the Agreement.
Agreement clauses
[5] The clauses of the Agreement relevant to this dispute are set out below.
[6] Clause 6.5 of the Agreement details ‘Overtime’. Of relevance are clauses 6.5.3 and 6.5.4, which provide:
“6.5.3 All time worked in excess of that provided for in Clause 6.1 (Hours of Work) or before the ordinary starting time or after the ordinary ceasing time shall be deemed overtime and will be paid, except as otherwise provided, at time and a half for the first 3 hours and then double time. Each day stands alone when over is being calculated.
6.5.4 Overtime undertaken by shift workers shall be paid for at the rate of double time.”
[7] Clause 7.1 of the Agreement details ‘Statutory Holidays’. Of relevance are clauses 7.1.1, 7.1.5 and 7.1.6 which provide:
“7.1.1 Lactalis is a fresh Milk business and must operate every day of the year to effectively manage milk supply. This is recognised between the parties. Meeting the needs of our customers in the dairy industry requires flexibility from our workforce when supplying our customers on Public Holidays. The parties agree that this clause shall be read in accordance with the document “Brisbane Public Holiday Payments” prepared by the Company as at 4th June 2015.
…..
7.1.5 Subject to clause 7.1.6 all work done by an employee on:-
• 1 January;
• 26 January (Australia Day);
• Good Friday;
• Easter Saturday;
• Easter Sunday;
• Easter Monday;
• 25 April (Anzac Day);
• Labour Day;
• The birthday of the Sovereign;
• Christmas Day;
• Boxing Day;
• Royal National Agriculture Show Day, Queensland; or
• Any day appointed under the Holidays Act 1939 to be kept in place of any such holiday
will be paid for at the rate of double time and a half with a minimum of four hours except for Good Friday, Easter Sunday and Christmas Day (25 December) which will be paid at the rate of triple time.
7.1.6 All time worked on any of the public holidays set out in this clause outside the ordinary starting and ceasing times of the day of the week on which such holiday falls shall be paid for at double the rate prescribed by this Agreement for such time when worked outside the ordinary starting and ceasing times on an ordinary working day, up to a maximum of quad time.”
Questions for arbitration
[8] Prior to hearing this matter, the AWU proposed the questions for arbitration be:
Having particular regard to clauses 7.1.5 and 7.1.6 of the Lactalis Australia Pty Ltd – Brisbane Operations Enterprise Agreement 2019:
Question 1: Are employees who worked the hours on ANZAC Day 2020 (25 April 2020) applicable to clause 7.1.6 of the Agreement? And
Question 2: Are employees that are entitled to clause 7.1.6 of the Agreement, entitled to overtime as per clauses 6.5.3 or 6.5.4 of the Agreement at double the rate?
[9] Lactalis did not oppose the questions proposed by the AWU. The questions for arbitration are those above at [8].
Hearing
[10] I listed the matter for hearing by telephone on 3 September 2020. Mr Aaron Santelises, Industrial Advocate and Legal Advisor of the AWU appeared for the AWU. Mr Ben Cooper, Associate Director of Mapien was granted leave to appear for Lactalis. The following people gave evidence for the AWU:
• Mr Paul McGrath, AWU Organiser;
• Mr Michael Anderson, Warehouse Assistant; and
• Mr Jeremy Morley, Process Operator.
[11] Ms Sarah Bradley, HR Manager gave evidence for Lactalis. Neither party required the others’ witnesses for cross-examination during the hearing, although I did have a number of questions for Ms Bradley during the hearing.
Evidence of the AWU
Evidence of Mr Paul McGrath
[12] Mr McGrath made two witness statements in these proceedings. He is an Organiser at the AWU and represents Lactalis employees who are members of the AWU.
[13] As a result of the COVID-19 pandemic, on or around 26 March 2020, the AWU and Lactalis entered into a Memorandum of Understanding (MOU). It reads, in part as follows:
“BACKGROUND
…….
D. Lactalis and the AWU are bound by the Lactalis Australia Pty Ltd (Brisbane Operations) Enterprise Agreement 2019 (“Agreement”).
E. Lactalis and the AWU agree that the COVID-19 Virus poses an unprecedented threat to Lactalis business continuity and the health and safety of the Lactalis workforce and immediate action is required to mitigate the risk of infection between the workforce.
F. Further risk mitigation actions taken b the Lactalis include alignment of casual workers with the same roster patterns as permanent Lactalis workers and providing an additional 10 days special leave for workers who are required to isolate due to COVID-19.
G. The parties wish to outline in this Memorandum of Understanding the agreement reached regarding the change to the roster arrangements for the team commencing 23 March 2020.
………..
4. Temporary Isolation Rosters
4.1 The parties agree to the implementation of temporary rosters for fixed day, afternoon and night shifts with a fixed break in between each shift for the work group to ensure isolation of workers within each roster group.
4.2 The new roster arrangements will include the removal of any 12 hour rosters that straddle day, afternoon and/or night shifts. The hours worked for the new roster arrangements will be 7.6 hours per shift and payment for overtime hours will be in accordance with the Agreement.
4.3 The new roster arrangements are temporary and implemented with the intention of minimising the risks of transmission during the COVID-19 Pandemic.
4.4 Any permanent changes to rosters in the MDES work group will only be implemented in accordance with the consultation clauses under the Agreement.
4.5 The Parties agree to waive the 7 day notice period required for roster changes under clause 6.2.8 of the Agreement.
4.6 [not used]
4.7 Lactalis will provide an additional 10 days of ‘Special Isolation Leave’ to Employees for leave required due to COVID-19 illness or isolation in accordance with company policy.
4.8 The temporary isolation rosters are a five day roster (Monday to Friday) with overtime opportunity on the weekends. Overtime will be offered to Lactalis employees (in keeping with isolation shift schedules and in accordance with clause 6.5 of the Agreement) prior to the utilisation of casual labour.
4.9 The new roster arrangements will not prevent an employee from accruing 5 weks annual leave as outlined within clause 7.2 of the Agreement.
4.10 The pay and conditions under the new roster arrangements will be in accordance with the provisions of the Agreement.
4.11 Lactalis will continuously review its risk mitigation strategies with regards to COVID-19 to ensure that it is acting at all times with its workers’ health and safety and job security through business continuity as a primary priority.”
[14] Mr McGrath gave evidence that on or around 6 May 2020, he contacted Lactalis on behalf of the AWU’s members regarding clauses 7.1.5 and 7.1.6 of the Agreement. He communicated to Lactalis that the interpretation of the clauses is that, should an employee work on ANZAC Day, and it is beyond their ordinary hours, in consideration of the executed MOU, the member is entitled to quad time for the hours worked.
[15] Ms Bradley sent the following email to Mr McGrath on 6 May 2020:
“Hi Paul,
As discussed/requested – please see below the company’s formal response regarding the public holiday pay rates for ANZAC day.
1) The company submits that clause 7.1.6 states that the quad time payments apply to hours outside of what the workers was rostered for the shift only, giving consideration to our usual shift start and finish times. Therefore if a worker is rostered on for the public holiday (irrespective of whether it is an overtime shift or ordinary hours), the public holiday rates apply as stipulated in clause 7.1.5 (double time and a half for ANZAC day) for the hours worked within their usual roster pattern. If a worker works past the usual or rostered finish time then they are entitled to double this rate up to quad time for the hours either side of usual rostered start and finish times. i.e. 06:00am to 14:00 – double time and a half, if worker works back to 16:00pm, the hours from 14:00-16:00 are paid at quad time.
2) Whilst we appreciate there may be an alternative interpretation to clause 7.1.6 the company would submit that this has been the accepted interpretation and under clause 1.7 the parties agreed that the custom and practice applying to the payment of penalties will not be changed and the above interpretation should stand.
Happy to discuss further.”
[16] On 13 May 2020, Mr McGrath again raised the issue and Lactalis rejected the AWU’s interpretation of the clauses.
[17] Relevant to the document “Brisbane Public Holidays Payments” as at 4th June 2015, cited at clause 7.1.1 of the Agreement, Mr McGrath’s evidence is that he attended all bargaining meetings on behalf of the AWU and its members and was not provided any such document. His evidence is that he understands the document to have been made by Mr Corey Webb, a former Lactalis HR Manager.
[18] Mr McGrath noted that the document produced by Ms Bradley in her evidence before the Commission includes a purported document however he notes that it describes it as having been amended between June and September 2015 “by agreement with the AWU, employee delegates and Parmalat”, and notes it is dated 3 September 2015. Mr McGrath disputes that it was the agreed interpretation between the AWU and Lactalis for purposes of the current Agreement.
Evidence of Mr Michael Anderson
[19] Mr Anderson made a witness statement in these proceedings. He is employed by Lactalis as a Warehouse Assistant, having worked for Lactalis (and its predecessors) since 1997. Mr Anderson is also an AWU delegate.
[20] Mr Anderson’s evidence is that due to the COVID-19 pandemic, the MOU was executed between Lactalis and the AWU in which employees were to work all ordinary hours between Monday to Friday. In this period, employees were rostered on ANZAC Day 2020, being Saturday, 25 April 2020.
[21] Mr Anderson gave evidence on that 25 April 2009 and 25 April 2015, when ANZAC Day fell on a Saturday, Lactalis paid its employees triple time, as demonstrated by his pay advices for those periods.
[22] In oral evidence, Mr Anderson stated that he had not been provided a copy of the document titled “Brisbane Public Holidays Payments”, and it was never provided in voting material when he voted relevant to the Agreement. Mr Anderson was on the negotiating committee for the Agreement and he said that it was never discussed.
Evidence of Mr Jeremy Morley
[23] Mr Morley made a witness statement in these proceedings. He is employed by Lactalis as a Process Operator, having worked for Lactalis (and its predecessors) since March 2000.
[24] Mr Morley’s usual roster is to work 38 ordinary hours from Monday to Friday. It is his evidence that he worked on Saturday, 25 April 2020 (ANZAC Day), and had completed all his ordinary hours for that week from Monday to Friday before working that ANZAC Day.
[25] Mr Morley also gave evidence that on 25 April 2015, when ANZAC Day fell on a Saturday, he was paid triple time, as demonstrated by his pay advice for that period.
[26] Mr Morley was also a member of the negotiating committee for the Agreement and he too said that the “Brisbane Public Holidays Payments” document was not discussed, nor was it provided on voting for the Agreement.
Submissions of the AWU
[27] The AWU submitted that per clause 7.1.5 of the Agreement, ANZAC Day is recognised as a public holiday. As such, employees should be paid at the rate of double time and a half with a minimum of four hours, with the exception of clause 7.1.6 of the Agreement. It was submitted that the application of clause 7.1.6 results in an employee who works on a public holiday that is outside the ordinary hours being paid:
(a) double the rate when working outside the ordinary working day prescribed by the Agreement; and
(b) it could be up to quad time, when it is on Saturday.
[28] It was submitted that the key words for consideration within clause 7.1.6 of the Agreement are:
(a) ‘outside the ordinary starting and ceasing times of the day of the week’ and ‘ordinary and ceasing times on an ordinary working day’;
(b) ‘paid for at double the rate prescribed by this Agreement’; and
(c) ‘up to a maximum of quad time’.
[29] It was submitted that employees of Lactalis are entitled to up to quad time on the basis that they had worked more than their ordinary hours when working on the ANZAC Day (25 April 2020) and in turn, clause 7.1.6 of the Agreement applies to the current matter. It is submitted that is so because the employees have worked their full complement of ordinary hours Monday to Friday of that same week.
[30] The AWU made the below submissions with respect to the words of clause 7.1.6 and the principles of construction of enterprise agreements per the Full Bench decision in Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (“Berri”). The AWU utilised parts of the decision in Berri to describe certain “rules”, described below:
Rule 1: (1) The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
Rule 2: (7) In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
Rule 3: (9) If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
[31] In determining how the various clauses are to be interpreted, the AWU submitted that relevant to “Rule 2”, the clauses are not susceptible to more than one meaning. I take that to mean that the AWU submitted that its understanding of the clauses is the only one that is possible for the Commission to adopt. It is not clear from the AWU’s submissions what they then make of the alternative put by Lactalis.
[32] Relevant to “Rule 3”, the AWU submitted that the only relevant evidence is the facts to the circumstances outlined within three paragraphs of the written submissions. It did submit, however, that the pay slips of Mr Anderson and Mr Morley relevant to ANZAC Day in 2009 and 2015 provide that employees were paid triple time.
[33] It was submitted that the above evidence demonstrates a previous history of employees being paid double the usual rate on public holidays in accordance with clause 7.1.6 of the Agreement.
[34] As to the three expressions or terms that are required to be determined, the AWU submitted the following.
‘outside the ordinary starting and ceasing times of the day of the week’ and ‘ordinary and ceasing times on an ordinary working day’
[35] In considering the words ‘outside the ordinary starting and ceasing times of the day of the week’ and ‘ordinary and ceasing times on an ordinary working day’ the AWU submitted that the key consideration is first clause 1.8.16 of the Agreement, which provides:
“1.8.16 ‘Ordinary time’ means the hours of work specified in clause 6.1 and 6.2 of this agreement.”
[36] When referring to clauses 6.1 and 6.2 of the Agreement, it can provide the start and ceasing ‘times’ via hours. Clause 6.1 of the Agreement provides:
“6.1 Hours of Work
6.1.1 Subject to Clause 6.2 (Working of a 38 Hour Week) the ordinary hours of work shall not exceed an average of 38 hours per week, to be worked on one of the following bases:-
a) 38 hours within a work cycle not exceeding 7 consecutive days; or
b) 76 hours within a work cycle not exceeding 14 consecutive days; or
c) 114 hours within a work cycle not exceeding 21 consecutive days; or
d) 152 hours within a work cycle not exceeding 28 consecutive days.
6.1.2 The ordinary hours of work may be worked on not more than 5 consecutive days in a week, Monday to Sunday inclusive subject to the following:-
a) Ordinary hours worked on a Saturday shall be paid at time and a half.
b) Ordinary hours worked on a Sunday shall be paid at time and three quarters.
c) Any arrangement of hours which includes a Saturday or Sunday as ordinary hours shall be subject to agreement between the employer and the majority of employees concerned.
d) The ordinary hours maybe worked between 6am and 6pm.
6.1.3 The ordinary hours of work shall not exceed ten on any day. Where the ordinary working hours are to exceed eight on any day, the arrangement of hours shall be subject to the agreement of the employer and the majority of employees concerned.”
[37] The AWU interpretation of clause 6.1 is:
(a) ordinary hours of work cannot be more than 38 hours per week (clause 6.1.1 of the Agreement);
(b) ordinary hours of work can be worked on no more than five constant days in a week, which may fall in or on Monday to Sunday, however, it is subject to the following terms:
i. ordinary hours worked on:
a. Saturday are paid at time and a half; and
b. Sunday are paid at time and three quarters.
ii. any arrangement of a consecutive five days that includes the Saturday or Sunday will need to be agreed by the majority of employers and employees;
iii. the ordinary hours of work can be defined as between 6am and 6pm (clause 6.1.2 (d) of the Agreement); and
(c) the ordinary hours cannot exceed 10 hours per day, and should the same occur, it must be agreed by the majority of employees concerned.
[38] The AWU submitted that clause 6.1 states that the ordinary hours are 38 hours, and they vary as to what time they would work; however, the recommend time for shifts can be between the hours of 6:00am and 6:00pm, and only over five consecutive days.
[39] Clause 6.2 of the Agreement provides:
“6.2 Working of a 38 Hour Week
6.2.1 The 38 hour week will be worked on one of the following bases, most suitable to the employer after consultation with and giving reasonable consideration to the wishes of the employees concerned:-
a) By employees working less than eight ordinary hours each day; or
b) By employees working less than eight ordinary hours on one or more days each work cycle; or
c) By fixing one or more days on which all employees will be off during a particular work cycle; or
6.2.1.1 By rostering employees off on various days of the week during a particular work cycle so that each employee has one work day off during that cycle.
6.2.2 Rostered Days Off
Rostered days off may be accrued up to a maximum of ten days. Once seven days (53.2 hours) have accrued employees shall be given the option by the company to take at least one RDO in the next three weeks. If the employee does not take at least one RDO in this period, the RDO will be paid out at single base rate time, in excess of ten days. Rostered days off shall be taken at times to suit the employer's work requirements.
Notwithstanding the above, an employee may, at their discretion, choose to have their rostered days off paid out at ordinary rates. Where rostered days off are a continuing feature of the employee's roster sufficient hours must be retained to cover the next rostered day off period.
Rostered days off may be utilised during holiday shutdown periods (e.g., Christmas).
Where employees seek to take more than five rostered days off, the employee will submit a leave application form no later than four weeks prior to the proposed commencement date of leave. A shorter period may be agreed by the relevant Supervisor/Manager.
Once the employer has received the employee's request, a decision on the leave shall be given to the employee no later than one week after the request has been made.
If approval of the leave is withdrawn by the employer and the employee can demonstrate that they will incur costs due to the cancellation, the employer will either reinstate the leave or meet the out of pocket expenses of the employee.
6.2.3 Different methods of implementation of the 38 hour week may apply to individual employees, groups or sections of employees in the business.
6.2.4 The employer and all employees concerned shall consult over the most appropriate means of working a 38 hour week.
6.2.5 The objective of such consultation shall be to reach agreement on the method of working the 38 hour week.”
[40] The AWU submitted that the key consideration of clause 6.2 is that the ordinary hours period for an employee is a 38 hour work week over five consecutive days.
[41] It was submitted that, factually, employees worked the 38-hour week from Monday to Friday per the MOU, particularly clauses 4.2 and 4.8.
[42] The AWU’s position is that as the ordinary hours were worked from Monday to Friday, ANZAC Day worked on the Saturday was worked beyond the ordinary hours, and thus the relevant overtime provisions apply to this matter. Employees worked all ordinary hours from Monday to Friday, and the same would be considered as working within hours that were classed as ordinary starting and ceasing times. Overtime was classed on the weekends and ANZAC Day was on a Saturday, being the weekend, thus, the overtime provisions apply, and further, the weekend was not classed as ordinary hours, as employees worked their ordinary hours on and between Monday and Friday.
‘paid for at double the rate prescribed by this Agreement’ and ‘up to a maximum of quad time’
[43] In considering the words ‘paid for at double the rate prescribed by this Agreement’and ‘up to a maximum of quad time’the AWU submitted the ordinary words are to be utilised to interpret them. In particular the words ‘double the rate’, ‘prescribed by this Agreement’ and ‘up to quad time’.
[44] The AWU submitted that double the rate is the plain and ordinary meaning, that the rate is double what is outlined in the Agreement. In consideration of the prescribed rate being defined in these submissions, the employees are to be paid double the rate on either clause 6.5.3 or 6.5.4 of the Agreement (if deemed a shift worker).
[45] The AWU referred to the ordinary meaning of ‘prescribed’ per the Oxford Dictionary as being “(of a person or an organization with authority) to say what should be done or how something should be done”. In consideration of the definition and in the context of the Agreement, the AWU submitted that an employee will be paid double the usual rate on the public holiday, if the employee has worked:
(a) a day that is beyond the ordinary hours; and
(b) on a public holiday covered by clause 7.1.6 of the Agreement.
[46] Further, the AWU referred to clause 4.8 of the MOU which states and confirms that all hours worked on the weekend are overtime, and submitted that the prescribed rate is overtime on the basis that employees have worked more than the ordinary hours.
[47] The AWU put that the prescribed rate for the employees is overtime on the basis that they have worked beyond the ordinary hours and what would be classed as ordinary start and ceasing times.
[48] It was submitted that clauses 6.5.3 and 6.5.4 of the Agreement are relevant because, per clause 6.5.3 of the Agreement, it states that all employees that work in excess of the hours shall be provided overtime. The prescribed rate is overtime.
‘quad time’
[49] In consideration of the prescribed rate as defined by the AWU’s interpretation, and that the said rate could be doubled, when calculating either entitlements (clause 6.5.3 or 6.5.4 of the Agreement), it was submitted it leads to quad time. In particular:
(a) Clause 6.5.3 of the Agreement:
i. first three hours:
a. original, time and a half; and
b. double the rate, triple time.
ii. after first three hours:
a. original, double time; and
b. double the rate, quad time.
(b) Clause 6.5.4 of the Agreement:
i. all time:
a. original, double time; and
b. double the rate, quad time.
[50] The AWU submitted that, as above, the quad time is provided when the prescribed rate is doubled. For the avoidance of any doubt, the AWU noted it does not dispute the definition of the quantum of quad time outlined within clause 1.8.19 of the Agreement.
Conclusion and remedy
[51] In summary, the AWU’s position is that employees should be paid via double the rate of overtime as per clause 6.5.3 or 6.5.4 of the Agreement. It was submitted that the questions for arbitration should be answered in the affirmative.
Submissions in reply
[52] In reply to Lactalis’ submissions as set out at [60] –[67], the AWU submitted the below.
[53] The AWU disputes that ‘on which such holiday falls’provides any further insight or context to clause 7.1.6 of the Agreement. In particular, the AWU submitted that:
(a) via “Rule 1” of Berri, when considering the ordinary meaning of the words, ‘on which such holiday falls’ should be viewed on the particular entitlement that is eligible on the certain day such as a week day, or weekends (Saturday or Sunday) with the relevant provision of the Agreement such as the overtime provisions contained within clause 6.5 of the Agreement, and if the hours on the day meet the definition of clause 6.1 of the Agreement; and
(b) that Lactalis’ submissions should not be substantiated as the ‘systematic roster pattern’, as the hours cannot be classed as ordinary hours on the basis that employees conducted their ordinary hours between Monday to Friday, which Lactalis does not disagree with as well.
[54] The AWU submitted that Lactalis does not provide any basis for its arguments as to how the hours refer to the ‘systematic roster pattern’, and not the definition of what is ordinary hours contained within clause 1.8.16 of the Agreement. It was submitted that the priority of interpretation is relying on the ordinary words of the Agreement (Rule 1 of Berri), and the relevant definitions contained within the same. In turn, the AWU submitted that Lactalis’ interpretation that ‘on which such holidays falls’refers to the ‘systematic roster pattern’is misconceived.
[55] The evidence of the AWU is that it did not agree to the document titled “Brisbane Public Holiday Payments” and the particulars within the same. It submitted that:
(a) it was not raised during the negotiations of the Agreement;
(b) the particulars within were not agreed to by the AWU during the negotiations of the Agreement;
(c) the only knowledge the AWU has of the document is that it was drafted by Mr Corey Webb with regards to the 2015 Agreement, but with no agreement with the union;
(d) the document referred to in clause 7.1.1 of the Agreement is dated 4 June 2015, and the document provided by Lactalis is dated 3 September 2015; and
(e) the document is not attached or enclosed to the Agreement.
[56] The AWU further submitted that if the “Brisbane Public Holiday Payments” document is utilised by the Commission, the AWU’s overall submission stands that there has been an underpayment by Lactalis.
Evidence of Lactalis
Evidence of Sarah Bradley
[57] Ms Bradley made a witness statement in these proceedings. She is a HR Manager of Lactalis for its Brisbane operations.
[58] Ms Bradley’s evidence is that clause 7.1 of the Agreement refers to a document “Brisbane Public Holiday Payments”. She stated that the document was prepared by Lactalis as at 4 June 2015, and is reproduced below:
“BRISBANE PUBLIC HOLIDAY PAYMENTS
This document was amended between June and September 2015 by agreement with the AWU, employee delegates and Parmalat. Any items removed from this document were removed because they were duplicated in the current EBA, or were changed and / or amended as part of the negotiation process for the 2015 Brisbane operations EBA.
The following conditions apply to Day and Afternoon shift employees:
1. The public holiday is not a rostered day and is worked – payment is a standard 8hrs (Public Holiday Off Day Attended) at single time plus 2.0 times (Overtime) for all hours physically worked.
2. For “12 Hour Roster” employees only: if a public holiday falls on a non-rostered day, an additional payment of 12 hours (Public Holiday Off Day) at single time is processed.
The following applies to Night Shift employees:
1. Payment for Items 1 – 2 is attached to the night shift before the public holiday (shifts crossing midnight into the public holiday).
The following conditions apply to 12 Hour Maintenance employees:
Payments 1 – 2 apply, however the calculation method is different:
1. Night Shift employees – the “Public Holiday” is the day the shift ends, i.e.: currently the shift commencing at 1845 Sunday night, ending on Monday at 0700 (a public holiday) will have the whole 12 hour shift paid as per Public Holiday rules above.
2. Payment for the shift is processed in the pay week prior to the Monday Public Holiday (as the shift starts).
3. In lieu of Payment 2 above, if a public holiday falls on a non-rostered day, 12 hours shall be paid at the time of the public holiday and paid at the same rate as if they were taken as Annual Leave (in the applicable pay run).
3rd September 2015”
[59] In oral evidence during the hearing Ms Bradley conceded that the document attached to her witness statement dated 3 September 2015 could not have been made on 4 June 2015, as it refers to amendments made between June and September 2015. Ms Bradley stated that she joined Lactalis in late 2019. She conceded that the document was not attached to any voting documents for consideration of employees voting for the Agreement.
Submissions of Lactalis
[60] Lactalis does not dispute that hours worked in excess of ordinary hours as provided for by the Agreement are overtime. Lactalis also does not dispute that hours worked by employees on ANZAC Day 2020, being a Saturday, were overtime for employees who work a 38-hour week, Monday to Friday.
[61] It was submitted that the AWU’s interpretation that employees should be paid double the rate of overtime as per clauses 6.5.3 or 6.5.4 of the Agreement is incorrect and based upon an erroneous reading of clause 7.1.6.
[62] Lactalis put that the AWU’s submissions isolate the term ‘the ordinary starting and ceasing times of the day of the week’from its context in clause 7.1.6, and submits that the term is a reference to the ordinary hours performed by employees. It was submitted that a proper consideration of the term must include its full textual description, which is ‘… the ordinary starting and ceasing times of the day of the week on which such public holiday falls …’. [Lactalis’ emphasis]
[63] It was submitted it is clear in this context that the term is not a reference to individual employees’ ordinary hours but rather a reference to the systemic roster pattern operating in the workplace on the day that a public holiday falls. Clause 7.1.6 operates as an alternative to the entitlement set out in the “Brisbane Public Holidays Payment Document”, and compensates employees with a higher overtime payment where they work hours before or after the operative roster shift on the public holiday.
[64] Lactalis submitted that employees’ entitlements for working on public holidays are derived from three sub-clauses of clause 7.1 (Statutory Holidays) of the Agreement, those being:
• Clause 7.1.1, which provides that Clause 7.1 is to read in accordance with the document “Brisbane Public Holiday Payments” prepared by Lactalis as at 4 June 2015;
• Clause 7.1.5, which provides for applicable penalties to be paid for work performed on public holidays, subject to the operation of clause 7.1.6; and
• Clause 7.1.6, which provides for at double the rate prescribed by this Agreement for such time when worked outside the ordinary starting and ceasing times on an ordinary working day, up to a maximum of quad time.
[65] It was further submitted that, read together, the above sub-clauses provide the following outcomes for employees:
(a) Where ordinary hours are worked on a public holiday pursuant to the roster, the employee is entitled to the applicable penalty provided by clause 7.1.5.
(b) Where overtime is worked on a public holiday between the ordinary starting and ceasing times of the roster shift for the day on which the public holiday falls, the employee is entitled to 8 hours single time plus double-time overtime for all hours worked.
(c) Where overtime is worked on a public holiday outside of the ordinary starting and ceasing times of the roster shift for the day on which the public holiday falls, the employee is entitled to double the applicable overtime rate up to quadruple time.
[66] Lactalis submitted that the evidence of Mr Anderson and Mr Morley supports Lactalis’ submissions and not those of the AWU. Mr Anderson’s and Mr Morley’s payslips attached to their witness statements indicate that in relation to the public holiday falling on 26 April 2015, employees were paid 8 hours at single time plus double-time overtime for hours worked in accordance with the “Brisbane Public Holidays Payments Document” for all hours worked. It was submitted that this is because the overtime fell within the ordinary starting and ceasing times of the day of the week on which the public holiday fell.
[67] Lactalis submitted, in summary, the questions for arbitration should be answered as follows:
Question 1: No, clause 7.1.6 is only applicable to employees who work hours outside of the ordinary starting and ceasing times on the day that the public holiday falls, but not otherwise; and
Questions 2: Yes, employees who are entitled to clause 7.1.6 of the Agreement are entitled to overtime as per clause 6.5.3 or 6.5.4 of the Agreement at double the rate up to a maximum of quad time.
Principles of construction of enterprise agreements
[68] The issue raised by the AWU concerns the proper construction of clauses of the Agreement. The approach to this task was set out in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd1 as follows:
“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
[69] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine2 a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA3 emphasising the following matters:
• Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means4 and there is always some context to any statement;5
• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”;6
• To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side;7
• The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context;8 and
• Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction.9
[70] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. The following observations of Madgwick J in Kucks v CSR10are also apposite in the present case:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”11
Consideration
[71] What is clear from the evidence before the Commission is that following the Agreement being approved and coming into operation, the parties entered into an MOU to deal with the COVID-19 pandemic to ensure shifts of workers did not come into contact with each other. The parties are to be commended for working together to provide social distancing in a workplace that is vital for the continued supply of dairy products to a large consumer base.
[72] The disputes resolution clause within the Agreement covers matters arising under the Agreement, the NES or “any other industrial matter”. I consider that to be a broad inclusion which could encompass the resolution of matters arising out of the MOU, if required. Only for the terms “any other industrial matter” being included in the dispute resolution clause would I agree that matters arising under the MOU can be considered. If the clause did not include that phrase, and the disputes resolution clause was limited to the terms in the Agreement and the NES, the MOU could not be considered.
[73] I do not consider that the parties have entered into dangerous territory in the MOU in making changes to the Agreement that may not be enforceable. The terms within the MOU appear to be permitted when regard is had to the terms of the Agreement. Generally, industrial parties should act with caution when entering into an MOU or side-deals as they may not have any enforceability when a variation to an agreement might properly be sought.
[74] The effect of the shift changes includes employees working ordinary hours Monday to Friday, such that when some employees worked on Saturday, 25 April 2020, the hours of work were beyond their ordinary hours of work, having already completed 38 ordinary hours Monday to Friday.
[75] I do not consider the terms of clause 7.1.6 of the Agreement are ambiguous or susceptible of more than one meaning, however clearly the parties do. Lactalis has made an admission that it might be capable of more than one meaning, and clearly the AWU thinks so too, and that is why the application has been made.
[76] Regrettably, I think the AWU has failed to read clause 7.1.6 in full, and has attempted to cherry-pick parts of the clause. There has been no regard to what “of the day of the week on which such holiday falls” means. There is no cogent reason why this has not been addressed by the AWU.
[77] I accept Lactalis’ submissions that clause 7.1.6 has regard to the ordinary starting and ceasing times of the day of the week on which such holiday falls, and it is not relevant to the employee’s ordinary hours of work. That is, the inquiry relevant to Saturday, 25 April 2020 is what is the ordinary starting and ceasing time for Saturday? If, for example, the ordinary starting time for Saturday is 8:00am and the ordinary ceasing time is 5:00pm, all hours worked outside of those times would be paid at double the overtime rate up to a maximum of quad time. This would be true of any employee working that particular day, whether they had worked 38 hours Monday to Friday beforehand, or whether the work on that particular day formed part of their ordinary hours of work.
[78] In the scenario above with an 8:00am starting time and a 5:00pm ceasing time, the hours worked within that span would not be paid at double the overtime rate up to a maximum of quad time. Only the hours outside of the ordinary starting and ceasing times of that day, that Saturday, would be paid at double the overtime rates, up to a maximum of quad time.
[79] If, for example, the ordinary starting and ceasing times for Sunday work is more limited; say it was only 10:00am – 4:00pm, if an employee was required to work on Easter Sunday and they worked prior to 10:00am, they would be entitled to double the overtime rates up to quad time for work up to 10:00am, and then again at these higher rates if the work continued beyond 4:00pm. That is the effect of the words “the ordinary starting and ceasing times of the day of the week on which such holiday falls.”
[80] Clause 7.1.6 never inquires whether the employee is working their ordinary hours or not. There is simply no regard for whether the hours to be worked on that public holiday constitute an employee’s ordinary hours or overtime hours for that week. The payment rule in clause 7.1.6 applies to an employee whether they have worked five, ten or 45 hours in that week.
[81] As to why employees have been receiving triple time for work performed on a public holiday in earlier years where it fell on a Saturday, it appears to me that it was done so pursuant to the “Brisbane Public Holidays Document” where it provided for single time plus double time payment. This provides for a payment greater than that contained at clause 7.1.5 of the Agreement which only allows for double time and a half for ANZAC Day.
[82] Clause 7.1.5 is read subject to clause 7.1.6. Clause 7.1.5 states that “all work done by an employee on [a public holiday] is paid at double time and a half (except for some stated Christian holidays), however being subject to clause 7.1.6, the effect of the two clauses combined is:
(a) Work performed in the ordinary span of hours on the particular public holiday, that being the relevant day of the week, is paid at double time and a half; and
(b) Work performed outside of the ordinary span of hours on the particular public holiday, that being the relevant day of the week, is paid at double the overtime rate, up to a maximum of quad time.
[83] On the AWU’s reasoning, pursuant to clause 7.1.5, the double time and a half payment for ANZAC Day where it falls on a Saturday would only have application where those hours formed part of the employee’s ordinary hours of work, and it would be up to quad time where the employee had already worked their ordinary hours during the week. There is no such provision in clauses 7.1.5 and 7.1.6 relevant to how many ordinary hours the employee has worked in the days surrounding the public holiday to determine the rate of pay.
[84] On reflection, I consider Question 1 to be a little unhelpful, because while it is known that employees worked on ANZAC Day on 25 April 2020, it is not clear what is meant by “the hours”.
[85] In answering Question 1, I determine that if employees worked prior to the ordinary starting time for Saturday work, or they worked hours following the ordinary ceasing time for Saturday work, they shall be entitled to double the rate of overtime payable under the Agreement, up to a maximum of quad time. This is so, whether the work performed by the employee is their ordinary hours of work, or whether they have earlier worked their ordinary hours of work in the week.
[86] My answer to Question 1 has answered Question 2.
[87] In answering the questions, it does not say what rate should be payable for the hours worked on 25 April 2020 between the ordinary starting and ceasing times for that day, other than to say that it is not quad time as submitted by the AWU. Clause 7.1.5 of the Agreement would have the hours paid at double time and a half. Lactalis has been paying these hours at triple time pursuant to the “Brisbane Public Holidays Document”, a version which is said to have been incorporated into the Agreement.
[88] I understand Lactalis will continue to pay triple time in such circumstances.
[89] Of significant concern is the fact that the parties’ evidence bears out that the “Brisbane Public Holiday Payments” document dated 4 June 2015 is not available, and whilst said to be incorporated into the Agreement at clause 7.1.1, was not put to employees when they voted on the Agreement in late 2019 as required by s.180(2) of the Act.
Conclusion
[90] For the reasons given above, the questions for arbitration have been answered.
COMMISSIONER
Appearances:
Santelises A, for the Applicant.
Cooper B, for the Respondent.
Hearing details:
3 September 2020, Brisbane (by telephone).
Printed by authority of the Commonwealth Government Printer
<AE507119 PR727488>
1 [2017] FWCFB 3005 at [14].
2 [2017] FWCFB 4487.
3 [2014] NSWCA 184 at [71] – [85].
4 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.
5 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
6 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
7 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing)
8 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].
9 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
10 Kucks v CSR Limited (1996) 66 IR 182 at 184.
11 Kucks v CSR Limited (1996) 66 IR 182 at 184.
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